Investor Rights in Central Security Depository Systems - Comments on the Triangle Issuer - Intermediary - Shareholder

Abstract

This paper shows that current corporate and securities law requires issuers, depository banks and shareholders to interact in order to enable the exercise of shareholder rights. Modern corporate law must be interpreted as three-party, rather than two-party relationship. Accepting the triangle of issuer, intermediary/ies and shareholder is indispensable for the adequate understanding of issues and problems related to shareholder rights in the contemporary public corporation. The paper describes the situation under the current German law and addresses recent reform steps. The paper concludes with an outlook on the harmonization in Europe through the forthcoming European shareholder rights directive.

Keywords: Shareholder Rights, Investor Protection, Central Depository System, Banks, Shareholder Meetings, Authorization

JEL Classification: G20, G21, G24, K19, K20, K29, K39